Tuesday, November 30, 2010

I've finished McLean/Nocera All the Devils are Here (cf. link, link). I still think highly of it, although I don't think it ended quite as well as it began. I liked it for the "deep background" on the 80s and 90s; the corollary is that they are not quite as wonderful for the ticktock of the closing weeks (I suppose for ticktock you go to Andrew Ross Sorkin, whom I haven't read)--at the very end, they are reduced to diary entries.

Something else: they're impressively incomplete in their coverage. I can't really fault them for this: the story is too protean for one book anyway. But they do seem to go fishing where the fish are; so, good stuff on Merrill and AIG and Goldman, moderately good on Ameriquest and Countrywide (have they been reading Michael Hudson's Monster?)--more haphazard on Lehman, almost nothing on B of A, Citi or the Morgans (and why do our chroniclers say so little about WaMu?).

But here's a takeaway: no surprise to say that the uproar had many components. My point is that in retrospect I think we saw some coming; others, really not. That is: careful students understood that real estate was an unsustainable bubble; that a savings glut brought trouble in its wake; that trade imbalances posed a long-term threat (still do, IMO). But I don't think many but outsiders realized just how glow-in-the-dark potentially lethal banking had become. Yes, yes, we know about the John Paulsons, the Andrew Redleafs, who saw through the mess and profited from it. But most of us probably thought, as they say of Alan Greenspan, that it just wan't conceivable a big firm would blow itself up.

We know now how cruelly wrong that was: big firms did blow themselves up, and others imbibed billions of our taxpayer dollars to escape it. The real virtue of books like McLean/Nocera is that they give us a beginning taste of just how Guignol dysfunctional big banking really was.

Monday, November 29, 2010

Time to make straight out a point I've made sidways before. The estate tax. This is the year we don't have one; next year it is due back. At the moment, we're on track for the 2001 level of 55 percent with a $1 million exemption. But I wouldn't count on it: the administration is talking about 45 percent with a $3.5 million exemption, while conservatives think 35 percent and $5 million might be nice. Wonk Room provides a crisp summary of the costs and benefits--more precisely the beneficiaries--of the proposals.

I can't improve on their analysis but I want to focus on another point. When we talk about "conservatives" here, the party of honest toil, the party that lies awake night sweating beads over the possibility that some union auto worker, some welfare mother some--hell, some derelict under the bridge--might get the "wrong incentives" out of government policy, might be tempted to, you know, like "slack off."

And that's my point. If we accept the principle of "right incentives" then our only option is an estate tax that is confiscatory. Okay, not 100 percent of everything-maybe a dependency allowance that runs through, say, age 18 (but hey, you can work in most states at 15, 14--and are there still newsboys?). I suppose we could even allow further spending on education--but only those who prove they can profit from it, like say, students of refrigerator repair or call center maintenance; only for a C average (make that a B average); certainly not for critical studies of anything.

You think I jest? Listen, I've been around the campuses of half a dozen major private universities; I understand the tragedy of dependency. I know what it looks like to see our best and brightest lounging around the poolside or the polo field, like the bears at Yosemite with their butts obtruding from so many garbage cans. Actually, we've got the bears (and the welfare mothers) pretty much under control; all we need now is to give the same sort of treatment to the trust fund babies.

Do I believe what I just said? Nah, not really. I like giving money to kids. I have the great good fortune to be a little bit solvent, and if the economy doesn't go completely off the rails (!!!) I may actually leave something behind for them. Which would please me. Selfish on my part I know, a weakness, a guilty pleasure, but my socialist leanings are well known. I do concede that a serious incentive-oriented public policy would tolerate none of this softness.

Meanwhile, I'm looking for one, just one, of these incentive oriented Republicans willing to step up to the plate and call for an estate tax of 100 percent and an exemption of zero. Any takers?

From Romenesko, we learn that John Steinbeck's Travels with Charlie is, well, a work of fiction--at least one that would not pass the Oprah test today. I can't say I ever gave it a moment's thought before but it is hardly surprising: times change. But while I am thinking on it, has anybody checked up on Henry David Thoreau lately? I seem to recall hearing when I was in college that all those nights he was supposed to be out there grappling with nature in the raw, he was actually home having dinner with his mother..

Fn.: A quick search of my aggregator shows that I and a lot of other people cannot spell "Romenesko:" we put in an "a" for the "e." But a search under the wrong spelling yields more hits (ignoring the author's own stuff) than the right one does.

TPM indulges in a moment of sour amusement at the thought that our rigorously vetted and highly trained overseas diplomats find themselves reduced to writing about Botox. I can't say they're wrong, but isn't that in the nature of things? Who was it who said that if you stay up with somebody until three o'clock in the morning you hear lots that is boring but once in a while you hear some really incredible stuff. And the mark of skill in any craft is the power to sustain the drudgery that it entails. Ah, Botox..

Sunday, November 28, 2010

Is why The Classical Tradition by Anthony Grafton and others is so cheap. I found mine in the bookshop at the Metropolitan Museum of Art at about $40. I did something mean; thinking it must be a mispricing, I snapped it up on the spot. I got my comeuppance, though: I got home to find I could have had it at Amazon for about $32.

At first look, I would have guessed anywhere from $100 to $300. Not that it is worth that much (except maybe it is), but rather because publishers don't feel ashamed, even in the age of online bookstores, to slap a fancy price on an impressive item.

And impressive is certainly the right word: 1001 (sic) pages of suavely elegant essays intended (quoting the preface) "to provide a reliable and wide-ranging guide to the reception of classical Graeco-Roman antiquity in all its dimensions in later cultures."Which is to say: not the stuff you are likely to find in a random Google search, and precisely not what you will find in Google. This is a non-vacuous point: for years I kept my old one-volume Columbia Encyclopaedia on the ready because it had lots of stuff I simply couldn't find on the web. As time went by it was clear that its continuance was largely sentimental, like an old wife dog that you can't bring yourself to put down after so long an attachment. But where on the we will you find the kind of succinct elegance chosen here more or less at random:

Petrarch...made clear that he brought a new viewpoint to the study of the ancient historians. Like Trevet, he knew and prized the great compendia of Eusebius-Jerome and Augustine as well as the ancient historians. But it was Livy and Suetonius--as well as Virgil and Ovid--whose work he designated his 'favorite books' in a programmatic list, made up almost entirely of pagan authors. 'What else,' Petrarch asked, 'is history but the praise of Rome?' Though the question was rhetorical, Petrarch's answer was extremely substantive...

"Horde" as in "Mongol Horde," means the central headquarters, the general's encampment.

Well, actually that I knew. What I didn't know is that it survives in "Urdu," the name of the langauge spoken in Pakistan, an offshoot of Hindi, said to be the form that evolved among soldiers. Or as a tour guide in Delhi told me a few years bak--"it's a camp language."

You tired of all those people who keep telling you that Republicans and Democrats ought to just cooperate more? Here's the sometimes-ornery Barry Ritholtz with a list of stuff that left and right seem to agree on. I am sure it is only partial, yet it is remarkable how much is on it. One that poked me in the eye: fully eighty percent of those polled think the Citizens United campaign finance decision wa wrong. I also like his honor roll of economists who think it would be just fine to break up big banks. Including, of all people, Alan Greenspan. Maybe he next bubble you hear will come not from Wall Street but form the tar pots.

Maybe someday they'll think I was crazy, putting all this work and energy into an art form in decline. Frankly, I'm not at all sure that it isn't a losing battle.

Oh, I won't be coy. It's James Levine, music director at the Metropolitan Opera in New York, rounding on 40- years' association with the company. The remark is quoted in The Maestro Myth, Norman Lebrecht fascinatingly gossipy history of modern conducting. I'm not clear on the exact date but it seems to be about 1990. Lebrecht says that Levine's "prime achievement" (at least in his early years) was "to nurture a succession of fine singers in a world bereft of vocal talent.

But he adds that "in addition to developing singers, Levine worked wonders with the troublesome orchestra, never one of the Met's glories." I'll say; I'm not old eno--well, actually am old enough to remember the earlier barren years but I wasn't doing opera back them (my first Met encounter was 1990; they were doing
Dvořák's Rusalka; we were in the upper balcony and it was hot). Still if you follow opera journalism at all, you can sense the awe with which his reputation is held among opera professionals and fans. We saw him just a couple of weeks ago in the HD performance of Don Pasquale; he looked pretty decrepit (but if I count right, he's only 67). Still, as I guess I said back then, the opera was good but the overture itself was one of the most remarkable I've ever heard. One can only wish him 40 more.

Update: Here's a source that says that the Met premier of Rusalka doesn't come until 1993. Memory a little shaky tonight is it, old boy?

This is one of the true benefits of having a brain tumor. Everyone wants to hear what you have to say.

Former Wall Street bond salesman Gordon Murray, dying of brain cancer, who is spending his finite hours writing a book of investment advice. (Link). The secret? Apparently "mutual funds, diversify." Making Murray, as ron Lieber says "one of the highest-ranking Wall Street veterans to take back much of what he and his colleagues worked for during their careers."

Aftherthought: Makes me remember my sometimes friend Arthur Leff, master one-linerist who died many years ago, way too young. Leff had cancer and he knew it was terminal but it was weirdly asymptomatic. He also had phlebitis which hurt like hell. He told (I hear second hand) his colleague Harry Wellington: Goddamit Harry, not only am I dying but I'm sick.

Still reading Bethany McLean's and Joe Nocera's* Admirable All the Devils are Here, and I pick up a theme worthy commentary; it may be just a tic of the authors but it resonates with me.

Background: N&M's book appears to me so far to be the best all-over analytical account of the late uproar--at the very least, up there with Charles Morris' Two Trillion Dollar Meltdown or Mark Zandi's Financial Shock. It's not always an easy read, in part because it is populated by so many unlikeable characters--not the testosterone-driven young bucks of Michael W. Hudson's Monster, but the greedy and rapacious banker/traders of Wall Street and their bosses, for whom (often) bullying and intimidiation seemed to be the strategy of choice.

And not merely "choice": forget about all the talk about leadership and staff support--N&M make it reasonably clear that in plenty (though not all) cases, bullying and intimidation work: that you're going to get more out of your staff if they sweat bullets out of skipping Saturday morning in favor of their daughters' soccer games. As Machiavelli says, given the choice between love and fear, choose fear.

But here's a nuance: two of the most telling episodes in the story involve bosses who carried fear to a logical, if suicidal extension: nobody dared tell them the truth.

Item: Stan O'Neal of Merrill Lynch, a man who M&N describe, in a wonderfully telling phrase, "liked to play golf by himself." N&M recall a story about "Greg Fleming, one of the few O'Neal lieutenants who had the temerity to disagree with him." Fleming, they report

was having dinner with him, pressing him on a handful of issues. As the dinner was ocncluding, O'Neal said, "This is getting too painful."

"Stan, I don't understand what you mean by 'too painful.' I'm just disagreeing with you," replied Fleming.

"I don't think we can have dinner anymore," said O"Neal. They never did.

The other is Joseph J. Cassano, formerly head of "financial products" (heh!) at AIG--the man Matt Tabbai calls "patient zero" of the financial meltdown. By all accounts, Hank Greenberg's AIG was as festering swamp of intrigue and isolation, mostly generated by Greenberg himelf, but Cassano seems to have been a particularly hard case, running his division like a pirate captain with habit of staging temper tantrums.

Anyway, quite late in the game, it finally sinks in on a couple of senior FP executives that they've got a problem on their hands--huge exposure on obligations backed by lousy collateral:

And yet, how to break this newsd to Cassano without having him blow his stack? How to explain thhat this seemingly great business was exposing the firm to enormous risks that non one had been aware of? They couldn't. Park himself never spoke to Casssano, but Forster decided that the best way to approach him was to say tht the business hand changed and the underwriting standards were deteriorating. "We're comfortable with the portfolio today, but we're not comfortable going forward," Forster told Cassano, according to several former FP executives. "They were afraid to say that they had made a mistake," adds one of them. "They couldn't admit to that.

The upshot was that Cassano never learned the truth--until, that, is everybody learned the truth, by which time it was far too late to do anything to save the enterprise (except, of course, pour in a boatload of taxpayer money). The O'Neal story ends pretty much the same way.

Are all bosses so intolerant of information inflows? On N&M's account, no. The great counter-example here seems to be Goldman, Sachs which, whatever its vices, always seemed to keep the information channels open--always keeping the feedback loops friction-free, always disciplined enough to hear, if not accept, the bad news. I wonder if Cassano/O'Neal would handle the information issue differently if they had another chance.==*Amazon lists it in at least one place as Nocera & McLean; elsewhere as McLean and Nocera. The jacket picture I've seen shows McLean & Nocera. I have no reason to assume anything other than a fifty-fifty contribution.

I just now stumbled on a piece published in September of 2009, recording (as it says) "10 Gaffes by Doomed CEOs." I don't think "gaffes" was the right word (they certainly don't meet the Kinsley definition) although all 10 share the common quality of looking enormously stupid in retrospect: "we continue bullish"..."we are not scared," etc.

I suppose a couple of these people could justly claim that they weren't at fault for the ensuing calamity--latecomers brought in to clean somebody else's mess off the carpet--but still what strikes me is how few of these have suffered in any significant way for whatever participation they may have had in creating the problem. I won't reprint the whole catalog of misstatements here, but I herewith offer up a listing of the gaffers, together with (as best I can identify) their current situation. Note that none is in a penitentiary, or in hiding, or tied to an anthill and covered with honey.

Angelo Mozilo, Countrywide Financial: Mozilo may have suffered more than most; he entered into a settlement with the SEC that required him to fork over perhaps eight percent of his net worth in fines, but without admitting wrongdoing (link).

Martin Sullivan, AIG: Sullivan continues to serve on a variety of professional and charitable boards while striving to hang onto the pay package he received on departure (link).

Richard Fuld, Lehman Brothers: Said to be associated with Legend Securities in New York (link); five months after his cheery pronouncement, he transferred his Florida mansion to his wife for $100 (link).

Thursday, November 25, 2010

Sarah Palin be an idiot (applause, cheering and stamping of feet) but her having said "North Korea" when she might well have meant "South Korea" is very weak evidence of the point. It could be that she doesn't know which is which. But if professors lost tenure for saying "Plato" when they meant "Aristotle," we'd have some very empty faculties. For Sarah, this is a rap which, if it sticks at all, sticks only because it confirms an already-deep-seated conviction, like seeing Michael Dukakis in a tank.

I was a kid in New Hampshire, just up the road from Ground Zero, but still I wondered how it was that Plymouth got credit as the founding colony and not Jamestown. Now Pat Lang at the Athenaeum* has the real story: it's all abour branding.

I'm two days --or 47 years--late on this one, but I think I'll pass it on anyway: November 22, whatever its other associations, is also St. Ceclia's Day, honoring the patron saint of music, and the source of one of the grandest pieces of formal poetry in the English language, and a highly agreeable pieces of music. Here's the first verse of John Dryden's "Ode for Saint Cecilia's Day:"

From harmony, from Heav’nly harmony
This universal frame began.
When Nature underneath a heap
Of jarring atoms lay,
And could not heave her head,
The tuneful voice was heard from high,
Arise ye more than dead.
Then cold, and hot, and moist, and dry,
In order to their stations leap,
And music’s pow’r obey.
From harmony, from Heav’nly harmony
This universal frame began:
From harmony to harmony
Through all the compass of the notes it ran,
The diapason closing full in man.

Tuesday, November 23, 2010

My friend Scott has a blog, which I commend, and from which I expect great things. He links yours truly under the tag "daily rantings of a polymath." Odd that. Never in my borned days was I called a "polymath" until today, and today it happened twice. But I still think of myself as a simple barefoot country dilletante, or a bad case of attention surplus disorder.

And "rantings." Ooh, now that hurts, when I all I strive for is "solid wisdom," in the style envisioned by Mark Twain when the camel ate his overcoat:

In Syria, once, at the head-waters of the Jordan, a camel took charge of my overcoat while the tents were being pitched, and examined it with a critical eye, all over, with as much interest as if he had an idea of getting one made like it; and then, after he was done figuring on it as an article of apparel, he began to contemplate it as an article of diet. He put his foot on it, and lifted one of the sleeves out with his teeth, and chewed and chewed at it, gradually taking it in, and all the while opening and closing his eyes in a kind of religious ecstasy, as if he had never tasted anything as good as an overcoat before, in his life. Then he smacked his lips once or twice, and reached after the other sleeve. Next he tried the velvet collar, and smiled a smile of such contentment that it was plain to see that he regarded that as the daintiest thing about an overcoat. The tails went next, along with some percussion caps and cough candy, and some fig-paste from Constantinople. And then my newspaper correspondence dropped out, and he took a chance in that-- manuscript letters written for the home papers. But he was treading on dangerous ground, now. He began to come across solid wisdom in those documents that was rather weighty on his stomach; and occasionally he would take a joke that would shake him up till it loosened his teeth; it was getting to be perilous times with him, but he held his grip with good courage and hopefully, till at last he began to stumble on statements that not even a camel could swallow with impunity. He began to gag and gasp, and his eyes to stand out, and his forelegs to spread, and in about a quarter of a minute he fell over as stiff as a carpenter's work-bench, and died a death of indescribable agony. I went and pulled the manuscript out of his mouth, and found that the sensitive creature had choked to death on one of the mildest and gentlest statements of fact that I ever laid before a trusting public.

No, actually, that is not Innocents Abroad, where I expected to find it; it is Roughing It, which is supposed to be about the Sierra Nevada. How Syria got in there, I forget.

There used to be a joke around the Yale Law School--I heard it from the late, great Myres McDougal during my brief and transitory moment of passage there--that a Yale law grad didn't know how to replevy a dog. "Nobody from the Yale Law School," said Myres, "ever has to replevy a dog."

I've been remembering Myres as I read Adam Levitin's superb stuff over at Credit Slips on the back-office fiasco in the mortgage business: how nobody seems to be able to collect a claim because nobody seems to be able to find the claim, or to know who owns the claim, etc. See, e.g., link.

Adam is way ahead of me--and, I suspect, the entire law-teaching community--on the hard mechanics of this grim encounter. I'm learning a ton of good stuff from him but I want to throw in a thought: I wonder if part of the problem is that nobody anywhere knows how to replevy a dog.

By which I mean: in law school any more, nobody learns the boring stuff. And it's not just Yale: you go a long way down the food chain, you find everybody's trying to be a Yalie. There is a convergence of reasons why this may be so. The most obvious is that the teachers don't teach it. One reason (not the only) reason the don't teach it is they don't know it. Chances are they went to Yale where nobody learns to replevy a dog. But if they did, the dean at Palookaville wouldn't hire them. He wants bright young fireballs with publicists and aromatherapists personal-brand consultants who are likely to put themselves on the map. Any candidate who betrays too much of an interest in the unvarnished mechanics of it all--that candidate won't even get to the interview.

Turn it around and the point brings us to the second important reason why nobody teaches the boring stuff: it's boring. Boring to teachers of course but (and this may be a less obvious point) boring to students. A few will complain and many more, at some level of consciousness, intuit that a lot of their future life will be tedious and that learning how to cope with tedium is one of the skills they ought to be cultivating now.

But oh look, there's an ice cream truck! Teachers and students collude to stick with the diversions because the other reality is just to dreadful to contemplate.

Just for clarification, I speak as a culprit here: I would confront with horror the prospect of having to spend my life on filing deadlines, supersedeas bonds and the question whether the allonge was really attached to the instrument. So I join the collusion: as they used to say in the Soviet Union, we pretend to work and they pretend to pay us.So if nobody got the back office right, it's because nobody knew how to do it, or got their mind round the idea that it was important.

I exaggerate, of course. I know damn fine law teachers who can tell you in detail just what the allonge is, thankyouverymuch. I won't out them here because I wouldn't want to be misunderstood as seeming to defame them with the curse of boringness. But if one of my own spawn were to consider law school (and in this environment, heaven forbid!), I can think of places I might point to where they might actually learn to do some of the stuff that lawyers actually have to do. They're out there, these nuts-and-bolts detail people. But they don't seem to have been in the back office at the banks.

Am I correct that the New York Times has not (yet?) published an obituary of Chalmers Johnson? There might be a paid obit, but I'm not finding one in a news search. Somebody still working on it, or a vendetta? Nice job in the Washington Post, though.

The adulation lavished on a one-term senator of little life experience was not a good thing for anyone. For Obama, it fed an already enlarged self-esteem that had become grotesque by the inauguration. A cruelly accurate piece by Jonathan Last in The Weekly Standard highlights the ghastly series of intentional evocations of Lincoln that a delusionally imprudent White House team put forward in the flush of victory. Important note to all future denizens of 1600 Pennsylvania Avenue: Those whom the gods wish to destroy, they first compare to Abraham Lincoln. Comparisons to Washington, Lincoln, or to either Roosevelt, if any, should come from other people, never from you or from anyone on your payroll — and preferably should come late in a presidential term, not when the incumbent still has that shiny new president smell.

Cute enough in itself but with this qualifier: one President who never in his lifetime enjoyed Linconesque adulation was Lincoln himself. Nearly always out of synch with his opposition party, some of his own party, many of his countrymen, and the commander in chief in a not-very-popular war, Lincoln by the summer of 1864 fully expected to wind up a one-term holder of his high office, his dreams in tatters.

I certainly hope Obama doesn't have to suffer Lincoln's fate to become revered. Still, there's a little voice in my mind that looks at Lincoln in 1864 and says "he's no Obama."

Monday, November 22, 2010

I don't know how exactly how many financial meltdown books but I think the correct characterization is "a slew." So I really wasn't prepared to find so much that is new and refreshing--so many answers to questions barely articulated--as I'm garnering from Joe Nocera's and Bethany McLean's All the Devils are Here. I downloaded the free Kindle sample last night and read it at a gulp: I'm on my way to pick it up again as soon as I finish this.

But I just have to salute them now for the deft elegance with which they are putting so much in order. Example: the "non-bank banks." We've all uttered that phrase, often, I suspect, with the uneasy sense that we didn't know how the hell we acquired a non-bank-banking sector. So try this: securitization. Once Wall Street (and Fannie/Freddie) churned up an appetite for securitization, they were willing to pay mucho bucks to the originators to buy mortgages. With money from Wall Street, the originators found they didn't need depositors any more. And--hey, wait a minute, if we don't have depositors, we're not a bank!

Another: I have been (and I guess I remain) an insistent fan of securitization per se, but N and M offer a succinct exhibition of the perils. For starters, securitization is neat insofar as it allows diverification. But tranching which seems almost to have been twinned with securitization at birth, undercuts the whole purpose and meaning of diversification. You wind up telling yourself you've stabilized the market when you've changed nothing or in fact made it worse. More: securitization means offloading your paper onto a quadrant far away--which necessarily saps your motivation to be careful (I think this is a "moral hazard" issue that is tied to securitization's character as insurance). And still more: the securitization model gives you deniabillity, sex without babies. Imagine our surprise that our transferors had bad mortgages. Imagine, right, you set it up that way.

M and N also do an elegant job of catching the difference in style between Roland Arnell of Ameriquest and Angelo Mozilo of Countrywide. Mozilo is the scrappy street kid who couldn't conceal his animosity for the toffs at the banking high table. Arnell was far subtler and smoother on the surface--he bought himself an ambassadorship--yet it was Arnell who flourished in the milieu of the "hard money business"--the bleak nether world of pawnships, payday lenders, "small loans" and suchlike. In the end, ironically, it probably didn't matter: each in his own way was a catastrophe for the world economy.

That's the first couple of chapters. Can't wait to find out what happens next, although I suspect it is not going to end well.

Litigators take note: here's a regulator sifting through a data dump from Ameriquest to try to find evidence of improper lending practices:

To sift through the enormous database of e-mails that Ameriquest provided, Cox tried several search strategies. One of the best was to do keyword searches for profanities. These called up some interesting exchanges. One was an e-mail from a manager to his sales staff: "We are all here to make as much $%&!ing money as possible. Bottom line. Nothing else matters.

Sunday, November 21, 2010

Steve Clemons' fine appreciation of Chalmers Johnson, who died yesterday at 79, is worth every moment of your time, even though it concentrates on the earlier, more "conventional" (?) portion of his career when he was merely a daring and original foreign policy conceptualist, before his evolution into a kind of a gadly, the thinking man's Noam Chomsky. I'm sorry I discovered Johnson only a few years ago but while he may be gone, he leaves behind a body of work that will reward careful attention for years to come.

I'm one who persist in believing that Obama can overcome rookie errors, lackluster leadership, paralytic centrism, even Bill Ayers and Jeremiah Wright to cruise to reelection in 2012 (and on balance a good thing, too). But how the hell he expects to survive don't-touch-my-junk is beyond me. Another week of this and he won't even put a shadow on a body scanner.

Sixty years ago when I was a newspaper copyboy, my friend (but I've forgotten his name) cracked me up with his jab about Dwight Eisenhower: "The only book he ever read was Crusade in Europe." Explanation for readers under 60: Eisenhower wrote ((it says here) Crusade in Europe. The idea that a President might not have written the book he wrote still struck one--or, at least, me--in those days as shriekingly funny (sports biographies, of which I was a happy consumer, used to bear the qualifier "as told to...").

So far as I recall, nobody actually asked Eisenhower what he did read (be happy to accept correction on this point if somebody can show me otherwise*). So it seems that we are in a different world when a candidate tells us (defensively?) that she keeps Ronald Reagan "on my bedside," and we wonder why she isn't reading My Pet Goat.

With that woman as with George W. Bush (as with Dwight Eisenhower) the topic of "reading" usually entails the not-so-subtle suggestion that that they don't read anything at all; or that, if they laid their hands on a copy of My Pet Goat, they'd hold it upside down. Still, for me the most cringeworhy moment in the modern history of Presidential reading involves a person who undoubtedly does read books, and that may be part of the problem. I'm thinking of Al Gore, who let slip that his favorite book was Charterhouse of Parma.

Oh dear. Well: actually my favorite book is Charterhouse of Parma (caution, exaggeration for effect, but it's probably in the top ten). But I'm not running for President. For Gore to say it in mid-campaign was either (a) a lie; or (b) an impossible piece of Mrs. Thistlebottom showoff; or (c) both (I incline to (b) but could accept (c)). Whichever way, it's a useful reminder of why President Gore never made it to the Oval Office after all.

Afterthought: Ike may not be Churchill or deGaulle, but Crusade in Europe is actually a pretty good book.----

I've been following this woman occasionally for a while. Her link is on the sidebar of a blog I read regularly (Belgian Waffle) and I sometimes remember to click through. I think she is actually brilliant. I wonder if this is her breakthrough post.

"Belgian Waffle," news to me, looks pretty good too.---Update: Last time I looked, the "dogs" post had 1,923 comments, not all from dogs.

Couple of interrelated nuggets on the op ed of this morning's New York Tiimes. One from Charles M. Blow's chart-of-the-week, today's on "reverse discrimination." The proposition before the house is: "Today's discrimination against whites has become as big a problem as discrimination against blacks and other minorities."

Agree/disagree? Overall, the vote is 54-44 disagree. The breakdown is mostly predictable: heavy agree among older, low education, white males (also Republicans, though that would be more consequence than cause). The interesting number is that 30 percent of blacks (and 32 percent of Hispanics) agree. Say that again: nearly one third of the supposed beneficiaries of reverse discrimination seem to think it has gone too far.

Micromillimeters away from Blow's chart is a new-to-me stat from the Pew Hispanic Center: (per Bob Herbert): "In the year following the official end of the Great Recession in June 2009, foreign-born workers in the U.S. gained 656,000 jobs while native-born workers lost 1.2 million."

I haven't gone back to the source on that one, but it is easy enough to riff a context: the native-born would have been rust-belt jobs that have been on their way out for years, while foreign born workers are moving in either at the high end (e.g., Indian doctors in Kansas) or low (meat slaughterers in Iowa)--both categories where for different reasons you just don't expect to find a lot of native-born.

With these numbers, I think one can profitably compare the trawl of recent census data (in this week's Economist) showing, inter alia, that we're becoming more polarized geographically as well as just politically: "In the 1976 election, ... 26% of voters lived in counties where one party won by 20 points or more. In 2008 a whopping 48% of voters did so."

Afterthought: "End of the Great Recession in June, 2009." Otherwise known as "mission accomplished."

I've written more than once about the capacity of inflation to unstick sticky wages, and how that may have been one reason Keynes thought inflation might not be a bad thing. So I open my morning email and find my friend John saying "here are your sticky wages"--with a link to this morning's New York Times:

Unions Yield on Wage Scales to Preserve Jobs

Yep, didn't always happen that way, did it? Although on reflection, I guess it isn't it brand new. When was it that the commercial pilots caved to two-tier pricing? End of the Bush years? Or earlier?

Friday, November 19, 2010

Underbelly groupies will recall that this forum favors a confiscatory inheritance tax as keystone of the Tea Party program, to help restore right incentives and a proper work ethic among the young: call it the "No More Trust Fund Babies Act of 2011."

In that vein, I've been e-chatting with my friend Mary lately about the nature and purpose of Social Security. Mary's attitude towards Social Security is, shall we say, dour; the words "Ponzi scheme" have been uttered. But she is no bozo: she's compassionate and willing to help the poor; she just wants to make sure she is getting the operant conditioning right. anyway, here's her latest:

Would it be better policy in means testing to factor in opportunity to provide for oneself, so that the worker who earned $1.8 million over his lifetime gets a bigger benefit, other things such as asset values being equal, than the person born into opportunity to do well who made $5 million over his lifetime but who was improvident? With opportunity should come responsibility.

I love it, and I don't think I've heard of it before. A bit like Henry George land taxation, where the levy is a function of productive capacity, whether the holder is using it or not.

Barry Ritholtz this morning posts the teaser opening anecdote from Michael W. Hudson's The Monster. I've been working my way through the book myself lately although I must say it is slow going. Not that it's particularly abstruse: it's well organized and briskly narrated. The trouble is rather that it is so full of simply awful people--not quite 100 percent of the cast, but pretty close. Well: some are perhaps amiable enough in a superficial sort of way (they are, after all, mostly salesmen). But they're all such desperate losers: empty-headed and gawk-eyed youths who strain to make $100k a year so they can blow it all on booze and broads. You can't even quite say they are misbehaving because they are such innocents about it: for the most part they just don't seem to grasp that their might be anything wrong with extracting the widow's mite for their own entertainment. Perhaps the one really telling factoid is that the most conspicuous whistle-blower in the story--the one for whom it all became just too much--is a former car salesman. If subprime looks bad to car salesmen, we've got a problem.

Beyond that, for me the most depressing--but also the most instructive--part of the story is the account of subprime bootcamp: the training sessions where their masters teach the apprentices how to cheat, lie and ultimately steal their way to profit for themselves and the the company, not necessarily in that order.

There's moral here for regulators: these guys are and will always remain hard to tame. The bad guys have 24/7 to figure out how to screw you out of your money; the regulators will always get distracted. It's also a melancholy reminder of the ineffectuality of "discloure" legislation. I introduced students to the standard-form contracts under the Consumer Credit Protection Act, "Truth in Lending," the first great piece of Federal consumer protection legislation. Senator Paul Douglas, who engendered CCPA, was a great ,man, one of the smartest, best informed and public spirited legislators of the 20th Century. But students would look at a CCPA form and seize up; I'd have to say--look, every word of this stuff is here because some legislator believes you need it for your protection. They saw it as a trackless void. It's been a few years now since I taught that stuff and it's back to trackless-void mode now for me, too. It is, of course, precisely this density and opacity that makes it so vulnerable to manipulation.

I don't have a ready answer to this but here's a pennyworth: maybe this already happens but I wonder if some consumer law centers might get into the business of running mortgage boot camps of their own--not just general-abstract introductions to "Your Financial Life," blah blah, but hands on sessions in which renegade professionals undertake to show you just what the %^$#@! are going to try to do to you when you go to the loan store (they may be quiescent at the moment, but they're only restin', believe me, they're still back there).

A bit like the infiltration course in Army basic training--do they still do that, I wonder? The metaphor is apt. The infiltration course trains you to face the enemy, and from Hudson's account, the enemy is just what you will face.

Afterthought: Wretched title, though, tells you nothing. He'll be lucky if they don't file it in science fiction.

Thursday, November 18, 2010

As I follow up on what I wrote the other day about war and killing (link, link), I find Kuznicki's fascinating thread (link, link) in which he showcases and explores the assertion of the great SLA Marshall that only 20 percent of the men in battle do all the serious killing. There are so many ways one could go with this, not all explored in the comments. For example, one, is it consistent with the general principle of organizational behavior that 20 percent of the people do 80 percent of the work (or 95-5, whatever)?

Update: Two, is it a subset of the (well-known fact, folkloric fantasy) that snipers do most of the killing in warfare?

But I want to go in a slightly different direction. I want to explore the point that 20 percent is quite enough, thank you to make the system work--that sheer bloody-mindedness rules, even if most of the populace is all sunflowers and bunny rabbits.

I think this may be parallel to the theory I've argued before about criminals. It is said that most criminals are stupid, and I would agree with a qualification: most stupid criminals are stupid, but it is the really clever sociopaths who work in the white space around the letter of the law, and who rise to top of great firms and even great nations (if there is a meaningful distinction between the two).

I'm veering towards the edge of my comfort zone here but I think I could turn this into a grander bit of social theory. That is: imperialism. The vulgar Marxists (and others) like to tell us that materialism is all about rapacious capitalism and its search for new markets. An embarrassing hole in that theory is that imperialism appears often to have been horrendously unprofitable. And yet imperialists persist, despite the economic drain.

The counter-theory (somebody must have worked this up) would be that imperialists go beat up on their neighbors just because they can--for the sheer hell of it, for the fun of it, just because it is there. History seems to offer a few indisputable. Take Tamerlain the great (please!): he didn't even clean up after himself. He just charged in and had himself a nice little conquest, piled up some skulls and moved on. The Hittites are a less dramatic instance but they seem to fit the pattern: by all appearances they got really nothing tangible out of their neighbors; the obvious inference is that they just must have enjoyed it.

In short, on this analysis, the bloody-minded set the agenda. It's their world, we just live (or die) in it.

Update: UB's warfare correspondent offers:

Actually, artillery is the major cause of death on the battle field. It’s pretty anonymous –It also may depend on what kind of battlefield – I suspect the snipers do major damage in the house to house fighting in Iraq where use of artillery is a bit of overkill.

The old Volvo blew its alternator, which is the Volvo equivalent of pancreatic cancer. So, off to the repair shop.* Meanwhile, a couple of really great morning reads:

Felix Salmon's piece about the microlending meltdown in Andrha Pradesh offers some interesting stuff about microlending but it is really a story about bloggers and the changing nature of journalism--about how a fully informed blogger in his mother's basement some thinktank somewhere can do more to clarify a story than a reportorial bigfoot who parachutes onto the scene and harvests a few random quotations.

Remember Cliff Clavin on Cheers and the buffalo-herd theory of how beer makes you smarter (hint: the weakest go to the wall)? Barry Ritholtz reminds us that it worked for GM, could have worked for banks. Sadly, it may not work for beer, though.

Oy, men: Prince William and his Kate "were flatmates in a group house, just friends, they said, until suddenly 'they became more. The 'more' was rumored to happen when Kate was wearing less, strutting the catwalk in lingerie for a student fashion show."

Wednesday, November 17, 2010

For as long as I have known anything about it, I've entertained an untutored sense that the "dual mandate" must be a bad idea. That is: the Federal Reserve is suppose to guarantee financial stability. No wait, the Fed (since 1977) is also supposed to promote full employment.

But these two are naturally at war with each other. In some cases (I am told), the best way to juice up employment is to promote a bit of inflation--in short, to destabilize. It may the right thing to do, but these two are essentially political changes that shouldn't be made by a bunch of technocrats.

So I paid attention when I saw that Sen. Bob Corker and Rep. Mike Pence are calling for an end to the dual mandate--want to trim the Fed down to the job of stability only.

In the context, it is natural to suppose that this new impulse towards breaking the dual mandate must be some sort of vile Republican plot and it may well be. But what kind of a vile plot? Or more precisely, just exactly how does it play out on the ground? Does the dual mandate make inflation (deflation) more (less) likely? And who cares?

Examples: I lived through a kind of "inflation golden age"--the 60s and 70s--when folks like me bought our houses at $20-$30k and watched the value inflate while we paid off our mortgages in little teeny deflated dollars. Yet I understand that a brisk dose of inflation may help jump-start a sluggish economy because it effectively reduces sticky wages.

So, should we think of the inflation lobby as a bunch of carefree debtors who want to inflate away their obligations? Or a bunch of grasping capitalists who want to impoverish the honest working man (if there be such any more)?

Another way of approaching the point. Consider the Tea Partiers, who put the new lot into power. Let's grant that they have an almost uncanny knack for embracing candidates fatal to their own best interests (end unemployment insurance, deregulate the banks again, and god forbid you should have health care). Exactly what is their interest in this little whirlpool? I'm almost ready to take it as an article of faith that if Corker and Pence are for it, then it will end up doing harm to the TPs in the end. But exactly how?

I'm not an economist and I don't even play one on TV. Anybody? Anybody?

In 1933, as her first marriage deteriorated, Ms. Osborne took a job in a dime store. It was a low point. Then came an astonishing call from the superintendent of the Colorado Children’s Home, who informed her that she had been adopted as an infant by the Osbornes! And that a man who said he was her real father, H. L. Shriver, had become a tycoon!! And that he had left her a substantial inheritance!!!

Tuesday, November 16, 2010

That piece where I thought I saw a "shift" in the Medal of Honor: Joel suspects I have my history wrong. Grant that the "new" awards seem to be for saving and not killing, still am I sure that this new practice is "new?" Maybe we've done it this way all along?

He's got me there. Actually, I don't know much of anything specific about who gets/got the Medal. Indeed, about all I know is what I learned from the Audie Murphy movie (though apparently Audie does counts as a killer: "he personally killed or wounded about 50," according to the official citation). And the Wiki makes a telling point: apparently our conception of the model has shifted over time and in particular we used to award it for stuff seemingly far less important than what it goes for today. Example: the first Medals went to the six Union soldiers who kidnapped "The General," the Confederate locomotive (no Medal for Buster Keaton, though).

I still suspect that a careful survey would show a trend away from bellicosity over time, but that is a job for a dissertation and I haven't done it (I'll blog it when I hear of one, though). So, advantage, Joel. I suspect there is no disagreement on the other proposition, though: war is about winning, not killing, and to glamorize killing is wretchedly to miss the point.

Bryan Fischer, a proponent of the view that Christianity requires more killing, actually has an interesting point about the Medal of Honor--it seems to have gone all girlie on us. He writes:

We have feminized the Medal of Honor.

According to Bill McGurn of the Wall Street Journal, every Medal of Honor awarded during these two conflicts has been awarded for saving life. Not one has been awarded for inflicting casualties on the enemy. Not one. ...

When we think of heroism in battle, we used the think of our boys storming the beaches of Normandy under withering fire, climbing the cliffs of Pointe do Hoc while enemy soldiers fired straight down on them, and tossing grenades into pill boxes to take out gun emplacements.

That kind of heroism has apparently become passe when it comes to awarding the Medal of Honor. We now award it only for preventing casualties, not for inflicting them.

In the narrow sense, he is correct: lately our recent habit has been to give medals for saving lives, not taking them. Beyond that, I think he makes a critical error. I wouldn't claim to be an expert on the theology of Christian slaughter. But I think he is all wrong on the purpose of war. The purpose of war is to win. Killing is incidental. If killing were the criterion, then the greatest general of the 20th Century would be Sir Douglas Haig. who drove the flower of British manhood in World War I at places like the Somme and Ypres. Concentration on killing is one of the reasons we had such a terrible record in Vietnam: with such a glorious body count, we couldn't get our minds round the idea that we might not have won.

True that a lot of people get killed in wars, and that plenty of times you have to kill to win. Ulysses S. Grant made a sad demonstration of that truth in the Overland Campaign. But you can make an instructive comparison with Grant's great companion-in-arms, William Tecumseh Sherman in Georgia. For white southerners, Sherman lived on (and, I suspect, still lives on) as the great villain of the piece. Yet the point of the March through Georgia is that, comparatively speaking, it wasn't all that bloody. Sherman won it by proving he could do anywhere, do anything: he made the Confederacy his bitch. But in terms of sheer bloodshed, it is one of the less dramatically bloody in recent history.

Fischer buttresses his argument with a quotation:

The object of war is not to die for your country but to make the other guy die for his.

But the source is instructive: it is George C. Patton, concededly an effective general, but one who seemed really to enjoy the killing part, at least as long as it was others who died. Patton's bood lust was strong enough that it made some of his own colleagues uncomfortable. It's not a good example for somebody who is trying to create a responsible theory of war.

Forget about Simpson-Bowles: eminently worthwhile and far more entertaining is The Economist's briefing paper on what happens when a Chinese company buys your business. It's a devilish piece of journalism because they sought out a number of leaders of target businesses and let them tell, anonymously, how the sale took place and what life was like thereafter. Teaser: the Chinese often overpay (and just bye the bye--remember what happened to the Japanese when they did that back in the 80s/90s?).

Monday, November 15, 2010

A conservative Maryland physician elected to Congress on an anti-Obamacare platform surprised fellow freshmen at a Monday orientation session by demanding to know why his government-subsidized health care plan from the government takes a month to kick in.

Republican Andy Harris, an anesthesiologist who defeated freshman Democrat Frank Kratovil on Maryland’s Eastern Shore, reacted incredulously when informed that federal law mandated that his government-subsidized health care policy would take effect on Feb. 1 – 28 days after his Jan. 3rd swearing-in.

Link. At least he seems to understand the importance of a public option.

I spent the summer of my 19th year as a shabbas goy; in between time, I bused tables and did general kitchen work. It was a good job: the work was hard but the food was good, the music was wonderful and the tips were--better than I was used to. But nobody ever told me the real point:

The sole purpose of non-Jews is to serve Jews, according to Rabbi Ovadia Yosef, the head of Shas’s Council of Torah Sages and a senior Sephardi adjudicator.

“Goyim were born only to serve us. Without that, they have no place in the world – only to serve the People of Israel,” he said in his weekly Saturday night sermon on the laws regarding the actions non-Jews are permitted to perform on Shabbat.

Link. Thanks to the Wichita Bureau who reports that he may have performed this particular cat back a bit.

I see the Chinese government is bulldozing (sic) ahead with its plan to remake Kashgar and specifically, to eradicate the "ancient quarter," which the New York Times describes as "a 2,000-year-old maze of adobe courtyard homes." I've actually been in the "ancient quarter" of Kashgar, and I'm ambivalent. On the one hand, the "ancient quarter" by the 21st Century had been reduced pretty much to a honey pot for tourists. This is perhaps inevitable under the Heisenberg law of tourism which says that once you go there it isn't there any more. On the other hand, as honey pots go it was actually an okay honey pot: you got the sense that you were seeing something like what the real ancient quarter had actually looked like, even if it was necessarily powdered and painted up for the arriving throng. And it certainly was a lot more pleasant than the "modernized" public market which, by my arrival, had already supplanted its ancient counterpart.

Moreover I concede that there may actually be some reason for modern development in Kashgar. It may be a million miles from nowhere--surely it is farther from Beijing than any other Chinese City? But it is a strategically located million miles from nowhere, what with being smack on the most obvious trade routes from Pakistan and from Central Asia. Still, if my experience with American urban renewal (remember Urban Renewal?) is any guide, then the main beneficiaries will be the lizards from Beijing who get to put up the new skyscrapers, probably with whole lot of government money and a large pourboire of private gain.

This is a story I really don't know enough about so I ought to just stifle but the topic fascinates me so I indulge myself again (cf. link, link) Specifically: it turns out there were not just two "orientations" for new (Republican) members of Congress last week; there were three. Here's the New York Times reporting on a two day session (the others were just one day) led by former House Speaker renegade outsider Dick Armey. So newbies had their choice: outsider Dick Armey, outsider Bill Bennett or he's-so-outside-he's-in-again Ed Meese,all ready to play Vergil to the Tea Parties' Dante.

My guess that of all these not-so-fresh faces, it is Armey who is most likely to keep the newbies' ear. It is Armey who created the Astroturfs that tickles the Tea Party toes. He's smart, he's hard-working and he is absolutely ruthless. His only obvious downside is that he once screwed up a rebellion against Newt Gingrich, but I suspect that is ancient history to everyone who matters except maybe Newt (come to think of it, where is his "orientation" meeting being held?). Still, I'm beginning to think the newbies might be well advised to take the advice they give the tourists at the Pyramids. To avoid the horde of hawkers at the gate, you rent your own camel half a mile away and gallop headlong through the waiting multitude.

Sunday, November 14, 2010

In the campaign between regulars v. upstarts re "orienting" the new Congress (link), the first round has gone to the regulars. Hardly surprising: the whole point of being a regular is that you know the ropes and know how to twist them around your opponents' necks. But I wouldn't get too cocky if I were the regulars: upstarts have a way of learning fast. There's a respectful backgrounder on Jenny Beth Martin here. She may be one of the Time 100, but it sounds like she is not quite ready for prime time.

Patrick is in an apocalyptic mood this weekend, reading C.H.Sisson's translation of Horace's Ode II.15, quoted above. Sisson's rendering is free; Horace didn't know about the South Bank and the Arts Council. Also somewhat abstract: Sisson begins "There will be nothing soon for the plough/ But huge bulks everywhere;" David Ferry offers "It won't be long before the little farms/Will be crowded out of being by the great/Estates."

I'm still chewing on Steve Rattner's book about the auto bailout and in particular, his encounter with the the seemingly immovable cluelessness of old GM. From Rattner's perspective, they just didn't get it: after a generation as lords of the universe and another of declining market share, they still saw themselves as lords of the universe--they just couldn't get their mind round the idea that some of their problems might be of their own making.

All this comes into focus for Rattner in the matter of of picking the right CEO for new GM. The story eminds me a bit of Lincoln's problem in finding a general to run the Civil War--just as Lincoln rolled the dice with McClellan and Halleck and Meade before he finally found Grant, so GM went through two insiders in a year, then an outsider who didn't work out so well either, before they settled on the current incumbent. Is the new guy Grant? Necessarily, the returns are not yet in.

But there is the larger problem of turning the battleship, moving the iceberg, herding the cats, herding the turkeys, whatever is the right metaphor as one tries to describe the process of instituting change at this vast empire, stilll running on the inertial force of generations. You've got to get senior staff from somewhere, and in the nature of things, the talent pool is bound to include some of the old culprits. Rattner makes no particular point of it, but the reader is impressed to learn that one of his least favorite people at old GM--the CFO--lands on his feet running after it is all over, running GM Asia. Maybe it's just horses for courses, getting him into the right job, but it is a somewhat alarming climax for Rattner's story.

I wonder if, in the end, the problem of corporation-building isn't a lot like the problem of nation-building: you can disband Saddam's army but you'll have chaos if you do, and one way or another, you''ll probably find yourself creeping back to them again because the alternatives are even worse.

Saturday, November 13, 2010

MOLINE, Ill. — Bobby Schilling has spent the last decade perfecting his pizza crust. (The secret? A hint of whole wheat flour in the dough.) But this year, like dozens of other previously apolitical Americans, the cheerful father of 10 looked at the Congressional candidate arena and got to thinking, “Hey, why not me?”

Why not, indeed. By the Times' count, Schilling is one of 35 new Representatives/Senators who come to Congress unburdened of any prior experience in elective office. To get numbers like that, you have to go back to 1948. There were only 30 such in the last Republican revolution in 1994.

I think we lost the election on November 2. Every race was won by a politician.

By "politician," O'Rourke makes clear that he means "someone who wants to be there," instead of, e.g., Cincinnatus, who reluctantly leaves his plow to serve his people and then eagerly returns to his plow. "[W]e may have elected a few reluctant politicians. But not reluctant enough."

Wait a minute, can these both be right? Sure they can. Recall the iron law of politics (updated for the 21st Century): there is more difference between two TPs, one of whom is a Congressman and the other of whom is not, than there is between two Congressmen, one of whom is a TP and the other of whom is not. These guys are no longer the outsiders; Congress is now them.

Corollary: he sad irony is that a Congress full of amateurs is at least vulnerable to the corrupting verities of legislative life as a Congress full of old pros, The reason is that there will always be old pros on hand to greet the amateurs--to spin them around, to turn them upside down, to leave them bewildered and gullible and ready for any kind of leadership. Recall the truth of the courthouse: the prosecutor says "I can get the grand jury to indict a ham sandwich." He can do it because the newcomers always need to follow somebody's lead, and he is there to lead.

Granted, I don't think we can say who in particular will spin around the latest crop of newcomers. And in fact, it probably won't be the conventional leadership. But just because they won't listen to Boehner and McConnell doesn't mean they won't listen to somebody. The town is absolutely boiling with lobbyists and related technocrats who stand ready to offer a guiding hand.

One person who understands this is one Jean Beth Martin, hitherto unknown to me, writing for Iron Mill News as the voice of "Tea Party Patriots.". "Don't Let Them Steal OUR New Members of Congress," she trumpets, adding "DC Insiders Indoctrinating OUR Freshmen."

Evidently the "Patriots" have been building up for an "orientation session" for new members of Congress; but it turns out that the Claremont Institute was working on plans for an orientation session of their own, same time, same day. It's hard to imagine anybody with more impeccably conservative credentials than Claremont: per Ms. Martin, their orientation keynote speaker is Bill Bennett.

But look at the TPP program: they've got John Shadegg, retiring from Congress to start his own 501(c)(3); they say they're "supported by" Sens. Jim DeMint and Tom Coburn. And their keynote speaker will be that outsider of all outsiders, Ed Meese--although you might have to be over 45 to remember him as the Attorney General and ideological purity enforcer under Ronald Reagan.

I can't really blame the newbies; they have to take their marching orders from somebody. But the TPP evidence is pretty good evidence that the Times is right, and O'Rourke is right, too.

Afterthought: O'Rourke (surprise!) does get credit for the line of the day: "Politics," he says, "is like vivisection--disturbing as a career, alarming as a hobby."

I watched the Met's HD Theatre performance of Don Pasquale today in kind of an echo chamber. No fault of the theatre; it was all in my head. We'd seen a live presentation of this production at the Met back in 2006. Matthew Polenzani as Ernesto today was easy listening: his voice is smooth and engaging and his performance energetic. But in the background I kept hearing Juan Diego Flórez who though perhaps not as smooth contributed an edgy vocal comedy that nobody working right now seems able to match. Anna Netrebko as Norina was the same--but wait, no, she's not the same: in the meantime, she had a baby. Her physique is more, shall we say maternal and her voice, while just as appealing is deeper or fuller, perhaps both. I wouldn't be at all surprised to learn that she is moving onto a different, more mature, sort of repertoire.

One who stayed the same was Mariusz Kwiecien as Ernesto. Structurally, it's an odd part. He's a schemer, not a lover; but he and Netrebko have more interchange than she and the romantic lead do. They've played it together now over several years, and as they say themselves in the interval, this kind of comic narrative is essentially an improv piece, where you get to make up--and improv--your riffs as they go along. They've got the chemistry and the energy to a high point now--so much so you can forget that the romantic lead is even there.

So, a good show. But I mustn't forget to mention what may have been the musical high point of the day--of all things, the overture, conducted by James Levine. We're told that this is the first time Levine has ever conducted Don Pasquale. So, maybe he hasn't had time to go stale. Still, his--and the orchestra's--rendering of the overture was one of the most fully-realized musical presentations I've ever heard from that pit; good enough so you were tempted to leave after the overture on the principle that the rest of the performance wasn't pretty good. And it wasn't, but it was good enough, and I'm glad I didn't leave.

Der Spiegel, from the country where good jobs survive recessions, gazes open-mouthed at the collapse of the American middle class:

Last year the US poverty rate reached 14.3 percent, 1.1 percent higher than in 2008. Almost five million Americans skidded below the poverty line ($22,050 annual income for a family of four), many from hitherto sheltered circles, where poverty was a foreign word. The number of long-term unemployed keeps rising. Worst off are families with children. Every fifth child in the US lives in poverty today.

"The situation was bad before, don't get me wrong," Bich Ha Pham, research director with the Federation of Protestant Welfare Agencies (FPWA), a welfare organization in New York City, told SPIEGEL ONLINE. "But this time, it could happen to anybody."

And nobody seems to care. Poverty wasn't an issue during the midterm elections -- and it won't be an issue now that the spendthrift deficit hawks of the Republican Party have reclaimed the House of Representatives.

"Nothing's going to happen," Curtis Skinner, head of Family Economic Security at the National Center for Children in Poverty (NCCP), told SPIEGEL ONLINE. The political swing to the right, Skinner fears, is "extremely hurtful" and "absolutely disastrous" to the interest of the weakest. Indeed, what Washington is debating now is not more help for the poor -- but extending the former President George W. Bush's tax cuts for the rich.